THE QUEEN v. TSE CHI KIN

IN THE SUPREME COURT OF HONG KONG

(Appellate Jurisdiction)

MAGISTRACY CRIMINAL APPEAL No. 224 OF 1938

____________

_______________

J U D G M E N T

_______________

1. The Appellant was convicted, after trial in the Magistrates' Court, on a charge of False Accounting, contrary to s. 19(1)(a) of the Theft Ordinance.

2. The particulars alleged that on or about 14 May 1987 he dishonestly and with a view to gain for another falsified a document made or required for an accounting purpose, namely, Concorde Pearls and Gems Co Ltd consignment note No. 13395P, by making entries therein which were misleading, false or deceptive in a material particular in that they purported to show a deposit on consignment with Bvlgari Giant Andy Tse (a firm)of two lots of South Sea Pearls, lot numbers Boris 137 and 141 belonging to Concorde Pearls and Gems Ltd valued at US$42,000.

3. Most of the evidence put before the trial magistrate was not in dispute. The effect of that evidence was that Concorde Pearls and Gems Co Ltd ("Concorde") was a wholesaler who supplied pearls on consignment to customers so that they had the opportunity to examine before deciding whether to buy. A consignment note containing details of the lot number, description, number of pieces in the lot, the weight and the price of the lot accompanied the delivery. It was an important document for accounting purposes because the copy of it kept by Concorde was a record of where the pearls covered by the note were to be found when they were not on the owner's premises.

4. Between January and May 1987 a business known as Marylands Company ("Marylands") made a number of purchases from Concorde using post-dated cheques which were subsequently dishonoured.

5. At some time prior to 8 May 1987 Cheung Mui-sang, a salesman employed by Concorde, was instructed by his employer not to enter into any further transactions with Marylands because of the defaults in payment.

6. On 8 May 1987, however, Cheung did supply to the proprietor of Marylands on consignment six items with a total value of US$60,000 accompanied by Concorde's consignment note number 13393P. The first two items listed in that note were Lot numbers 'Boris 141' and 'Boris 137'. The value of the two lots was US$42,000. The proprietor of Marylands gave Cheung a post-dated cheque drawn in Cheung's favour in the sum of HK$479,632.

7. On 10 May 1987 Cheung was asked by his employer to account for 'Boris 141' and 'Boris 137' and he did so by claiming that both lots had been consigned to Bvlgari Giant Andy Tse, the Appellant.

8. On 14 May 1987 Cheung went to the Appellant and persuaded him to do him a favour by signing the consignment note numbered 13395P stating that the two lots were on consignment with the Appellant even though they were in fact still on consignment with Marylands.

9. Marylands cheque drawn in favour of Cheung was dishonoured on presentation and the proprietor of Marylands fled from Hong Kong.

10. The Appellant when subsequently arrested made a statement under caution. In it he admitted that he knew what the purpose of a consignment note was and that he had signed the consignment note 13395P at Cheung's request even though he had not actually received the two lots listed in that note.

11. In evidence the Appellant said that, before signing the note he knew that had been instructed by his employer not to deal with Marylands on a consignment arrangement, that Cheung had disobeyed those instructions by delivering the items in return for a post-dated cheque, that Concorde was asking Cheung for the return of the two lots because another customer was interested in buying, that Cheung could not return the lots to Concorde because they were in the possession of Marylands and that there was a possibility Concorde would discover the truth with the result that Cheung would be in serious trouble with his employer.

12. The only issues at the trial were whether on that evidence the learned magistrate could be satisfied beyond a reasonable doubt as to the elements of dishonesty and 'view to gain for another'.

13. The learned magistrate was so satisfied and convicted the Appellant.

14. The Appellant now attacks the conviction on four grounds. In his first two grounds he attacks the finding that the Appellant was not motivated by a desire to return a favour for Cheung. The learned magistrate does appear to have gone beyond the evidence, and the admitted facts, when he found that the Appellant was not so motivated. The admitted facts contained an admission by the Prosecution that the Appellant was persuaded by Cheung "to do [Cheung] a favour" by signing the false consignment note. That finding, however, was of no importance one way or the other as regards the only issues which remained at the conclusion of the evidence.

15. The third ground attacks the learned magistrate's finding that the Appellant's falsification of the consignment note had, as part of its purpose, increasing Concorde's business so that [Cheung] would receive a salary gain and possibly promotion from Concorde.

16. The full finding of the learned magistrate as to this reads as follows:-

"The Appellant signed... the Consignment Note so as to give [Cheung] more time in the hope, however faint, that [Cheung's] business with Marylands might be successfully completed, so that [Cheung] would not be in trouble with Concorde but rather increase Concorde's business so that [Cheung] would receive a salary gain and possibly promotion from Concorde. Wherefore the Appellant acted as he did with a view to gain for another, namely [Cheung], which would ultimately benefit the Appellant's business through [Cheung] with Concorde."

17. Mr. Suen, who appeared for the Appellant both below and on the hearing of this appeal, conceded that if the learned magistrate's finding had ended after the first mention of Concorde, in the passage reproduced above, he could not attack it. The most that can be said about this ground in the Appellant's favour is that the learned magistrate introduced innocuous speculation. The part of the finding which could not be attacked provides ample support for the further finding that the Appellant did act with a view to gain for another.

18. The fourth ground contends that the evidence did not support a finding in favour of the Prosecution in respect of the only two issues in the case - dishonesty and view to gain.

19. The gist of Mr Suen's submissions in support of this ground was that the magistrate erred by equating falsification with dishonesty and that "a few days' grace" did not constitute "a gain" within the definition of that term under the Theft Ordinance.

20. In Kwok Yuen Sum v. R., (Crim. App 561/84), it was held that the element of dishonesty in offences under the Theft Ordinance is proved if the court affirmatively answers the two questions posed by the Court of Appeal in Ghosh, (1982) 75 Cr. App R. 154. Those two questions are:-

"1     was the defendant's conduct dishonest by the standards of reasonable and honest people?; and

2.    Did the defendant realise that it was dishonest by those standards?"

In Ghosh, the Lord Chief Justice pointed out, at p. 163:-

"In most cases, where the actions are obviously dishonest by ordinary standards ....... it will be obvious that the defendant himself knew that he was acting dishonestly".

21. The deliberate signing of a fraudulent consignment note is so obviously dishonest that the learned magistrate could not reasonably have come to any other conclusion than that the element of dishonesty had been proved.

22. In Eden, (1971) 55 Cr. App. R. 193, it was said by Sachs, L.J., at p. 197, that a temporary gain "could be constituted by putting off the evil day of having to sort out a muddle and pay up". Here, the Appellant's dishonest act was done with a view to postponing the time for Cheung to return the two lots of valuable pearls to his employer or account for their purchase price.

23. The learned magistrate was, therefore, right in holding that the evidence did establish the two elements which were in issue. There is accordingly no merit in this ground of appeal.

24. The appeal is dismissed.